Targeted integration of adeno-associated viral (AAV) DNA into human chromosome 19 occurs by nonhomologous recombination. The presence of the nonstructural protein (Rep) genes of AAV correlated with the specificity of proviral integration. Therefore, we investigated the involvement of Rep proteins in targeted integration. To facilitate the analysis of Rep protein functions, biologically active, recombinant Rep proteins were produced in E. coli. Binding of Rep to linear duplex DNA is a newly identified property of Rep which redefines the binding requirements for Rep proteins. The AAV DNA chromosome 19 integration locus is a specific substrate for Rep binding, establishing that Rep may act as an agent for targeted integration. The results of in vitro replication experiments demonstrated that a chromosome 19 subfragment may act as a Rep specific origin of replication. Thus we believe that in AAV infected cells, Rep promotes limited replication from the integration locus. The affinity of Rep proteins for either the viral or host substrate may permit Rep subunit exchange with the polymerase complex resulting in intermolecular DNA recombination.